BUSI MAVUSO: SAA shareholders need to support board’s turnaround plan

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The union’s wage dispute is not a policy dispute, and as such the shareholder representative should not be called in to help save the national airline

If there’s one aspect that has been at the centre of the collapse of governance across SA’s state-owned companies over the past decade, it is that the politics of the day have played itself out in the boardroom decisions of institutions such as SAA.

By stepping in now, it would serve to only kick the can down the road, and to ratings agencies such as Moody’s Investors Services that SA is not ready to make the unpopular policy choices around its state-owned enterprises. The airline is insolvent in its current configuration and is unlikely to ever generate sufficient cash flow to sustain its operations. A corporate restructure of the airline is quite simply unavoidable and long overdue. In its desperation for survival over the years, SAA has chosen the easier option of selling prize assets to solve its cash desperation including the Cape Town-New York and Cape Town-London routes. These acts are simply a race to the bottom.

 

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